He said Sky features guests from across the political spectrum, but it was an "error of judgement" to have Mr Cottrell on air.

"(Guests) must be held to account in the context of respectful discourse that meets community and our own expectations," Mr Frangopoulos said.

"Blair Cottrell will not be back on the channel."

Sky News has moved Greg Byrnes from news director to the newly-created position of acting program director, and Kaycie Bradford as acting news director, to oversee the guests and content of weekend programs.

Former Queensland Labor MP Craig Emerson, whose father was interred in a German prisoner of war camp in WWII, quit the broadcaster in protest.

"The decision to allow neo-Nazi Blair Cottrell onto the channel was another step in a journey to normalising racism & bigotry in our country," he tweeted.

During the interview, the former United Patriots Front leader called for immigration cutbacks and warned against "foreign ideologies" in Australia.

Cottrell was convicted last year of inciting contempt and ridicule of Muslims. He also has convictions for other matters, including arson.

He regularly tweets about Hitler and executing his "enemies" and has previously called for a picture of Hitler to be hung in every Australian classroom.

He has also previously appeared on other radio networks including 3AW and the ABC where he was challenged over his views.